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Brexit: How does leaving EU affect the United Kingdom?

In 2016, the people of the United Kingdom have decided to exit the European Union. In a referendum known as Brexit, over 70% of the British people voted to leave EU. The referendum was made after Tory Party’s manifesto suggested holding a referendum on UK’s EU membership.

Former Prime Minister David Cameron personally does not support Brexit. In fact, the result of the referendum caused him leaving the government. According to him, the United Kingdom will experience political and economic downturns if the UK will exit EU. He even presented 4-key essential points why the UK shall remain in the EU.

On the other hand, some experts weigh in the exit of the UK from EU. For them, the withdrawal of EU membership will help the United Kingdom in so many ways.

To help you understand more the impact of Brexit on the United Kingdom, here are some sectors which may be affected, positively and negatively by Brexit:

Economy

The European Union is one of the largest markets in the world, about one-fourth of the global GDP. Also, the EU is UK’s biggest trading partner. Almost half of the UK’s exports are to the EU, whereas 50% of imports are from the EU. With this, the EU membership attracts more foreign investments. For example, UK received over £900 billion of Foreign Direct Investment.

On the other hand, some Brexit supporters state that the cost of EU membership, roughly around £200billion can be better spent in improving Britain’s industries and technology, among others.

But for most economic experts, leaving the EU will shrink the British economy. Some of these effects include reduced business investments and decreased house prices. Further, Brexit critics state that every pound sent to the EU returns to Britain 10 times more because of trade and investments.

Trade

Today, the European Union has established trade deals with over 50 countries. If the United Kingdom leaves the EU, it has to renegotiate trade deals with these foreign nations. On the other hand, the UK can ‘independently’ pursue international trade deals. Moreover, some experts see that the exit from EU will increase the price and demands of UK’s imports which will provide a better opportunity for UK producers. Basically, for them, it will even help reducing the carbon footprint if British people produce and consume local products.

Investment

The United Kingdom is since then regarded as one of the world’s biggest financial centres. However, with its exit from the EU, many banks, financial firms, and investors have started re-establishing their bases back to the EU to take out and cease their operations in the UK. In fact, the Business for New Europe stated that the huge shift of businesses and investors would lead to reduced tax revenues. On the other hand, Brexit supporters firmly believe that the United Kingdom can still manage to reinvent itself as a supercharged economy.

Sovereignty

For some experts, leaving the EU would not improve the national sovereignty of the United Kingdom. According to Labour’s Hilary Benn, it will just instead take out the UK’s voice to influence events in the international arena. It will also remove UK’s power in the judicial and negotiating table, deciding on things that may affect Britain. Moreover, the UK will never be absolutely sovereign because it is still a member of Nato, the United Nations, the World Trade Organisations, and various treaties.

But for some, it will be an advantage because the UK does not have to abide by the rulings and judgments of the EU. The UK instead will still be a member of the European Court of Human Rights which is non-EU controlled.

Bureaucracy

According to Brexit supports, being part of the EU removes UK’s authority to design a political and economic framework that is targeted primarily to the common good of the British people. For them, if the UK exits EU, the British government can design a regulatory framework that can address directly the problems of the UK citizens.

Immigration

As we all know, the European Union orders the free movement of goods, services, labor, and most especially, people. Because of this, the UK has no control over immigration. People from EU member states can move freely to the UK. The UK is known for having a more generous welfare system. With this, immigrants go to the UK. According to some experts, the UK is now more vulnerable to terror attacks because of being an EU member.

However, the UK is as well dependent on EU immigrants in terms of labor and workforce. According to most British companies, immigrants from the EU are far more educated than UK citizens. In fact, 32% of EU immigrants in the UK have a degree compared to only 21% among UK nationals. Moreover, Brexit critics believe that being part of the EU creates the UK that is diverse in culture. It would also be convenient to stay in EU so that the 1.5 million British nationals settled in other EU member states would not have to move back to the UK and secure a visa.

Jobs

Basically, most employees will be affected if the UK exits from the EU. Why? According to statistics, over three million jobs in the United Kingdom are created by the EU. In fact, a huge percentage of UK companies work and trade with other EU member states. If trade and investment will be affected after UK’s exit from EU, employment will be greatly affected. There will also be job shortages, affecting the potential growth of UK’s economy. Further, a huge percentage of British workers outside the United Kingdom may also lose their job.

Security

As mentioned earlier, being part of EU may increase UK’s vulnerability to terrorism. Nationals from EU member states are free to move around the UK. However, some senior military figures argued the statement. For them, being part of EU is an “important pillar” in UK’s security. As a matter of fact, Defence Secretary Michael Fallon even stated that the UK benefitted a lot from being a member of the union. The EU has worked closely on defense and security. There is a unified exchange of criminal and passenger records to counter terrorism effectively.